DVA 10-K & 10-Q changes, risk factors and insider trading

This Annual Report on Form 10-K contains forward-looking statements within the meaning of the federal securities laws. Please read the cautionary notice regarding forward-looking statements in Item 7 of Part II of this Annual Report on Form 10-K under the heading "Management’s Discussion and Analysis of Financial Condition and Results of Operations." These forward-looking statements involve risks and uncertainties, including those discussed below, whichand if any of the following risks or uncertainties develop into actual events or if the circumstances described in the risk or uncertainties occur or continue to occur, they could individually or in the aggregate, have a material adverse effect on our business, cash flows, financial condition, results of operations and/or could materially harm our reputation. The risks and uncertainties discussed below are not the only ones facing our business. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial could also have a material adverse effect on our business, cash flows, financial condition, results of operations and/or could materially harm our reputation.

•our ability to effectively maintain, operate or upgrade our information systems or those of third-party service providers upon which we rely, including, without limitation, our clinical, billing and collections systems, and our ability to adhere to federal and state data sharing and access requirements and regulationsregulations, and successfully adopt or adapt to new technologies;

Our business is subject to a complex set of governmental laws, regulations and other requirements and any failure to adhere to those requirements, or any changes in those requirements,requirements or in federal or state legislation or regulations, could have a material adverse effect on our business, results ofand operations, financial condition and cash flows, could materially harm our stock price, and in some circumstances, could materially harm our reputation.

We operate in a complex regulatory environment with an extensive and evolving set of federal, state and local governmental laws, regulations and other requirementsrequirements, including executive orders, that apply to us.us and shape the competitive environment in which we operate. These laws, regulations and other requirements are promulgated and overseen by a number of different legislative, regulatory, administrative, and quasi-regulatory bodies, each of which may have evolving priorities and varying interpretations, judgments or related guidance. AsEach such,of these laws, regulations and other requirements are continuously changing, and we utilize considerable resources on an ongoing basis to monitor, assess and respond to applicable legislative, regulatory and administrative requirements,requirements. butDespite these efforts, there is no guarantee that we will be successful in our efforts to adhere to all of these requirements.requirements and there is no assurance that we will be able to accurately predict the nature, timing or extent of any changes to these laws, regulations or requirements or the impact of such changes on the markets in which we conduct business.

This Annual Report on Form 10-K, including this Management’s Discussion and Analysis of Financial Condition and Results of Operations, contains statements that are forward-looking statements within the meaning of the federal securities laws and as such are intended to be covered by the safe harbor for "forward-looking statements" provided by the Private Securities Litigation Reform Act of 1995. These forward-looking statements could include, among other things, statements about our balance sheet and liquidity, our expenses, revenues, billings and collections, patient census, the impact of the cybersecurity incident experienced by the Company in 2025, the potential impact of the One Big Beautiful Bill Act (OBBBA) and federal government policy changes or shutdowns, including with respect to federal funding and reimbursement rates of Medicare, Medicare Advantage, Medicaid and other government programs, availability or cost of supplies, including without limitation the impact of evolving trade policies and tariffs and any reduction in clinical and other supplies due to any disruptions experienced by third party vendors, including with respect to our ability to provide home dialysis services, treatment volumes, mix expectation, such as the percentage or number of patients under commercial insurance, theincluding effectspotential onimpacts usto andsuch ourmix operationsas a result of anyU.S. interruptionsadministration in key functions performed by our third party service providers or suppliers,policies, current macroeconomic, marketplace and labor market conditions, and overall impact on our patients and teammates, as well as other statements regarding our future operations, financial condition and prospects, capital allocation plans, expenses, cost saving initiatives, other strategic initiatives, use of contract labor, government and commercial payment rates, expectations related to value-based care (VBC), integrated kidney care (IKC), Medicare Advantage (MA) plan enrollment and our international operations, expectations regarding increased competition and marketplace changes, including those related to new or potential entrants in the dialysis and pre-dialysis marketplace and the potential impact of innovative technologies, drugs, or other treatments on the dialysis industry, and expectations regarding our stockshare repurchase program. All statements in this report, other than statements of historical fact, are forward-looking statements. Without limiting the foregoing, statements including the words "expect," "intend," "will," "could," "plan," "anticipate," "believe" and similar expressions are intended to identify forward-looking statements. These forward-looking statements are based on DaVita's current expectations and are based solely on information available as of the date of this report. DaVita undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of changed circumstances, new information, future events or otherwise, except as may be required by law. Actual future events and results could differ materially from any forward-looking statements due to numerous factors that involve substantial known and unknown risks and uncertainties. These risks and uncertainties include, among other things:

•external conditions, including those related to general economic, marketplacepolitical and global health conditions, including without limitation, the impact of global events and political or governmental volatility; the impact of the domestic political environment and related developments on the current healthcare marketplace, our patients and on our businessbusiness, including without limitation, developments related to domestic policy initiatives and guidance or potential government shutdowns; the continuing impact of theinfectious COVID-19 pandemicdiseases on our financial condition and the chronic kidney disease (CKD) population and our patient population; supply chain challenges and disruptions, including without limitationlimitation, with respect to certain key services, critical clinical supplies and equipment we obtain from third parties, and including any impacts on our supply chain and cost of supplies as a result of natural disasters or evolving trade policies, including tariffs; the potential impact on our patients and industry of new or potential entrants in the dialysis and pre-dialysis marketplace and potential impact of innovative technologies, drugs, or other treatments on our patients and industry; elevated teammate turnover or labor costs; the impact of continued increased competition from dialysis providers and others; and our ability to respond to challenging U.S. and global economic and marketplace conditions, including, among other things, our ability to successfully identify cost saving opportunities;

•the concentration of profits generated by higher-paying commercial payor plans for which there is continued downward pressure on average realized payment rates; our ability to negotiate and maintain contracts with these payors on competitive terms or at all; a reduction in the number or percentage of our patients under commercial plans, including, without limitation, as a result of healthcare, immigration or other policies implemented by the U.S. administration, continuing legislative efforts to restrict or prohibit the use and/or availability of charitable premium assistance, or as a result of payors implementing restrictive plan designs or resulting from negotiations with large commercial payors that we have in the past, and currently are, conducting on a concurrent basis;

•risks arising from potential changes in or new laws, regulations or requirements applicable to us,us or changes thereto, including, without limitation, the OBBBA and those related to trade policy, healthcare, privacy, antitrust matters, and acquisition, merger, joint venture or similar transactions and/or labor matters, and potential impacts of changes in interpretation or enforcement thereof or related litigation impacting, among other things, coverage or reimbursement rates for our services or the number of patients enrolled in or that select higher-paying commercial plans, and the risk that we make incorrect assumptions about how our patients will respond to any such developments;

•our ability to successfully implement ourstrategic strategiesand operational initiatives in a complex, evolving and highly regulated environment, including, without limitation, with respect to IKC and VBC initiatives and home based dialysis in the desired time frame and in a complex, dynamic and highly regulated environment;

•a reduction in government payment rates under the Medicare End Stage Renal Disease program, state Medicaid or other government-based programs and the impact of the MA benchmark structure and adjustment methodologies;

•our ability to attract, retain and motivate teammates, including key leadership personnel, and our ability to manage potential disruptions to our business and operations, including potential work stoppages, operating cost increases or productivity decreases whether due to union organizing activities, political unrest or legislative or other changes, demand for labor, volatility and uncertainty in the labor market, the current challenging and highly competitive labor market conditions, including due to the ongoing nationwide shortage of skilled clinical personnel, or other reasons;

•changes in pharmaceutical practice patterns,patterns related to pharmaceuticals, medical equipment or supplies, reimbursement and payment policies and processes, or pharmaceutical pricing, including with respect to oral phosphate binders, among other things;

•the variability of our cash flows, including, without limitation, any extended billing or collections cycles including, without limitation, due to defects or operational issues in our billing systemssystems, the impact of the cybersecurity incident experienced by the Company in 2025 or defects or operational issues in the billing systems or services of third parties on which we rely; the risk that we may not be able to generate or access sufficient cash in the future to service our indebtedness or to fund our other liquidity needs;

•factors that may impact our ability to repurchase stock under our stockshare repurchase program and the timing of any such stock repurchases, as well as any use by us of a considerable amount of available funds to repurchase stock;

•our goals and disclosures related to environmental, social and governance (ESG)sustainability matters, including, among other things, evolving regulatory requirements affecting ESGenvironmental, social and governance standards, measurements and reporting requirements; and

•repurchase of 9,832,70512,678,623 shares of our common stock for aggregate consideration of $1,389$1,788 million, and a 9.3%14.9% net reduction in our outstanding share count year-over-year;

•a net increase in consolidated patient growth of 12.4%,4.9%, withprimarily flatdriven patientby growth17.6% in U.S. dialysis and 62.6% international patient growth as of December 31, 20242025; and

•a net decrease of 18 U.S. dialysis centers as we continued to improve center capacity utilization, as well as a net increase of 14276 international dialysis centers primarily from acquisitions; andacquisitions.

We assess our revenue and operating performance for our U.S. dialysis business based upon several principal metrics including, among others, treatment volume, revenue per treatment and patient care costs. Each of these metrics may be impacted by a number of factors that change from period to period and over time. In 2025,2026 in our U.S. dialysis business, we expect relativelyapproximately flat year-over-year treatment volumes due to the net impact of a number of factors. These include, among other things, elevated mortality levels that remain elevated relative to pre-pandemic levels;periods, thebut continuedassuming a slight improvement in flu impact ofcompared missedto treatment rates, which in recent years have been impacted by increased hospitalizations2025; and theadmissions prevalencelevels ofconsistent severewith weather2025 events; andexcluding the impact of the supplyrecent disruptioncyber affecting our home dialysis supplies.incident. We expect operating income growth resulting from revenue per treatment improvements, primarily driven by rate increases,increases the net impact of our continuedand improvements in our billing and collections process,efforts miximpacted improvement andby the incorporationcyber incident, partially offset by the expiration of oralenhanced phosphatepremium bindertax reimbursementcredits intofor theexchange bundle, as described below.plans. We expect an increase in costs per treatment due to the oral phosphate binders and inflationary increases in labor and other costs, partially offset by a continued decline in centerdepreciation closureand costs.amortization costs as well as a decline in costs associated with the cyber incident. In 2025,addition, we expect the impact of phosphate binders on operating income to be approximately flat year-over-year. We also expect operating income growth in our international business as we continueand our expansion in international markets and we expect results in our 2025 integrated kidney care business to be consistent with 2024.business. We expect a continued increasedecrease in debt expense in 20252026 due in part to the financing transactions announced in 2024 and the expiration of our 2019 interest cap agreements in 20242025, as described below. We expect positive other income in 2026 as the result of decreased losses from our investment of Mozarc Medical Holding LLC (Mozarc). Finally, considerable uncertainty remains surrounding the continued implementation and development of the various governmental laws, regulations and other requirements that may impact our business, including the extent to the which such developments impact the behavior of other health care market participants such as payors, employers, charitable organizations and government agencies.

General Economic, MarketplacePolitical and Global Health Conditions; Legal and Regulatory Developments

The following table summarizes our revenues, operating income (loss) and adjusted operating income (loss) by line of business. See the discussion of our results for each line of business following this table. When multiple drivers are identified in the following discussion of results, they are listed in order of magnitude:

(1)For a reconciliation of adjusted operating income (loss) by reportable segment, see the "Reconciliations of non-GAAP measures" section below.

As of December 31, 2024, ourOur U.S. dialysis business is a leading provider of kidney dialysis services, operatingwhich as of December 31, 2025, operated 2,657 outpatient dialysis centers serving approximately 200,800200,500 patients, and contracted to provide hospital inpatient dialysis services in approximately 760740 hospitals. We estimate that we have approximately a 36% share of the U.S. dialysis market based upon the number of patients we serve.

In November 2024, the Centers for Medicare & Medicaid Services (CMS) issued a final rule to update the Medicare ESRD Prospective Payment System payment rate and policies for calendar year 2024. CMS has finalized ESRD facilities' average reimbursement by a productivity-adjusted market basket increase of 2.2% in 2025. In addition, from time-to-time CMS identifies drugs to be added to the ESRD PPS bundled payment. On January 1, 2025, phosphate binders, a drug class taken orally by many ESKD patients to reduce absorption of dietary phosphate, were incorporated into the ESRD PPS bundle. Phosphate binders are not considered accounted for in the ESRD PPS base rate at this time and will be reimbursed through a Transitional Drug Add-on Payment Adjustment (TDAPA). The TDAPA period currently is expectedset to continueexpire forat athe periodend of at least two years.2026. Currently, phosphate binders are offered in both generic and branded forms and are produced by multiple manufacturers. During this TDAPA period, our operating results could be materially impacted by certain factors, including physician prescribing patterns, the terms of supplier and other vendor contracts, the mix of branded and generic forms of the drug used by our patients, whether the drug enters into the ESRD PPS and becomes part of its bundled payment following TDAPA and, if so, at what rate and how payors will treat reimbursement of the drug at the conclusion of the TDAPA period.

For a discussion of government reimbursement, the Medicare ESRD bundled payment system, MA and commercial reimbursement, see Part I Item 1."Business" under the heading "U.S. dialysis business – Sources of revenue-concentrations and risks." For a discussion of operational, clinical and financial risks and uncertainties that we face in connection with the Medicare ESRD bundled payment system, see the risk factor in Part I Item 1A. "Risk Factors" under the heading "Our business is subject to a complex set of governmental laws, regulations and other requirements and any failure to adhere to those requirements, or any changes in those requirements..." For a discussion of operational, clinical and financial risks and uncertainties that we face in connection with commercial payors, including with respect to our MA business, see the risk factor in Part I Item 1A. "Risk Factors" under the headingheadings "If the number or percentage of patients with higher-paying commercial insurance declines,declines..." ifand the"If averagewe ratesare thatunable commercialto negotiate and maintain contracts with private payors payon uscompetitive declines...terms..."

We anticipate that we will continue to experience increases in our operating costs in 20252026 that may outpace any net Medicare, commercial or other rate increases that we may receive, which could significantly impact our operating results. In particular, we expect to continue experiencing increases in operating costs that are subject to inflation, such as labor and supply costs, including increases in maintenance costs, regardless of whether there is a compensating inflation-based increase in Medicare, commercial or other payor payment rates. In addition, we expect to continue to incur capital expenditures and associated depreciation and amortization costs to improve, renovate and maintain our facilities, equipment and information technology to provide improved clinical care, improve operating efficiency, and meet evolving regulatory requirements and otherwise.

U.S. dialysis patient care costs are those costs directly associated with operating and supporting our dialysis centers, home-based dialysis programs and hospital inpatient dialysis programs,programs. andThe consistprincipal principallydrivers of labor,our benefits,U.S. pharmaceuticals,dialysis medicalpatient supplies and other operatingcare costs of the dialysis centers.include:

•labor costs, including clinical hours per treatment, labor rates and benefit costs;

•vendor pricing and utilization levels of pharmaceuticals and medical supplies; and

•business infrastructure costs, which include the operating costs of our dialysis centers; andcenters.

Other cost categories that can present significant variability include insurance costs and professional fees. In addition, proposed ballot initiatives or referendums, legislation, regulations or policy changes could cause us to incur substantial costs to prepare for, or implement changes required. Any such changes could result in, among other things, increases in our labor costs or limitations on the amount of revenue that we can retain. For additional information on risks associated with potential and proposed ballot initiatives, referendums, legislation, regulations or policy changes, see the risk factor in Part I Item 1A. "Risk Factors" under the heading,heading "ChangesOur inbusiness federalis subject to a complex set of governmental laws, regulations and stateother healthcare legislation or regulations...requirements..."

Our average clinical hours per treatment decreased in 20242025 compared to 20232024 primarily due to a decrease in turnover as described below. We are always striving for improved productivity levels, however, changes in factors such as federal and state policies or regulatory billing requirements can lead to increased labor costs as can increases in turnover. In 2024,2025, the demand for skilled clinical personnel continued, exacerbated by the nationwide shortage of these resources. In 2024both 2025 and 2023,2024, we experienced increases in our clinical labor wage rates, which includes contract labor, of approximately 3.8% and 1.3%, respectively.3.8%. We expect to continue to see higher clinical labor rates in 20252026 due to labor market conditions, including changes in local minimum wage laws, and the continued competition for skilled clinical personnel. In 2024,2025, our overall clinical teammate turnover decreased from 2023,2024, but remains elevated from historical pre-COVID levels. We also continue to experience increases in the infrastructure and operating costs of our dialysis centers and general increases in utilities and repairs and maintenance. In 2024,2025, we continued to implement certain cost control initiatives to help manage our overall operating costs, including labor productivity, and we expect to continue these initiatives in 2025.2026.

Certain columns or rows may not sum or recalculate due to the presentation of rounded numbers (1)Normalized non-acquiredtreatment days reflect treatment growth reflects year over year growth in treatment volume, adjusted to exclude acquisitions and other similar transactions, and furtherdays adjusted to normalize for the number and mix of treatmentdays daysof the week in a given period versus the prior period.

Our U.S. dialysis operating revenues and expenses are directly driven by treatment volume. The increasedecrease in our U.S. dialysis treatments in 20242025 was primarily driven by additionala treatmentdecrease daysin average treatments per day due to higher mortality and increasedmissed treatments from acquireda more severe flu season, as well as fewer treatment growth partially offset by an increase in missed treatments.days.

Certain columns or rows may not sum or recalculate due to the presentation of rounded numbers U.S. dialysis average patient service revenue per treatment increased primarily driven by the incorporation of phosphate binders into the ESRD PPS bundle and an increase in average reimbursement rates from normal annual rate increasesincreases, including Medicare ratebase increases, revenue cycle improvements, favorable changes in mix, and an increase in hospital inpatient dialysis rates.rate.

This Quarterly Report on Form 10-Q, including this Management’s Discussion and Analysis of Financial Condition and Results of Operations, contains statements that are forward-looking statements within the meaning of the federal securities laws and as such are intended to be covered by the safe harbor for "forward-looking statements" provided by the Private Securities Litigation Reform Act of 1995. These forward-looking statements could include, among other things, statements about our balance sheet and liquidity, our expenses, revenues, billings and collections, patient census, the impact of the cybersecurity incident experienced by the Company in 2025 (cyber incident), the impact of the One Big Beautiful Bill Act (OBBBA) and federal government policy changes or shutdowns on our business, including with respect to federal funding and reimbursement rates of Medicare, Medicare Advantage (MA), Medicaid and other government programs, availability or cost of supplies, including without limitation the impact of evolving trade policies and tariffs and any reduction in clinical and other supplies due to any disruptions experienced by third party vendors, including with respect to our ability to provide home dialysis services, treatment volumes, mix expectation, such as the percentage or number of patients under commercial insurance, including potential impacts to such mix as a result of U.S. administration policies, current macroeconomic, marketplace and labor market conditions, and overall impact on our patients and teammates, as well as other statements regarding our future operations, financial condition and prospects, capital allocation plans, expenses, cost saving initiatives, other strategic initiatives, use of contract labor, government and commercial payment rates, expectations related to value-based care (VBC), integrated kidney care (IKC), MA plan enrollment and our international operations, expectations regarding increased competition and marketplace changes, including those related to new or potential entrants in the dialysis and pre-dialysis marketplace and the potential impact of innovative technologies, drugs, or other treatments on the dialysis industry, and expectations regarding our share repurchase program. All statements in this report, other than statements of historical fact, are forward-looking statements. Without limiting the foregoing, statements including the words "expect," "intend," "will," "could," "plan," "anticipate," "believe" and similar expressions are intended to identify forward-looking statements. These forward-looking statements are based on DaVita's current expectations and are based solely on information available as of the date of this report. DaVita undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of changed circumstances, new information, future events or otherwise, except as may be required by law. Actual future events and results could differ materially from any forward-looking statements due to numerous factors that involve substantial known and unknown risks and uncertainties. These risks and uncertainties include, among other things:

•our reliance on significant suppliers, service providers and other third party vendors to provide key support to our business operations and enable our provision of services to patients, including, among others, suppliers of certain pharmaceuticals, administrative or other services or critical clinical products; and risks resulting from a closure, reductionreduction, disruption or other disruptiontransition in the services or products provided to us by such suppliers, service providers and third party vendorsvendors, which may, among other things, increase our costs or expenses;

•the other risk factors, trends and uncertainties set forth in our Annual Report on Form 10-K for the year ended December 31, 2025 (2025 10-K), and Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, and the risks and uncertainties discussed in any subsequent reports that we file or furnish with the Securities and Exchange Commission (SEC) from time to time.

We assess our revenue and operating performance for our U.S. dialysis business based upon several principal metrics including, among others, treatment volume, revenue per treatment and patient care costs. Each of these metrics may be impacted by a number of factors that change from period to period and over time. For example, treatment volumes may be impacted by, among other things, mortality levels, missed treatment rates and admission rates. Revenue per treatment may be impacted by, among other things, rate changes, mix of patients with commercial plans and government programs as primary payor, timing of collections and seasonal factors such as patients meeting health plan co-insurance and deductibles. Patient care costs may be impacted by, among other things, labor market conditions and cost trends in pharmaceuticals and other medical supplies. We have set forth a discussion of certain of such factors below, and we believe that information related to changes in these metrics from period to period allows investors to assess the performance of the business.

We continue to be impacted by external conditions, including, but not limited to, those related to general economic, political and global health conditions and changing population or demographic trends. These conditions can impact our business in a variety of ways, including, among other things, by affecting our patient census, treatment volumes, revenues, results of operations and operating and other costs. Certain of these impacts could be further intensified by global events such as the ongoing conflicts in the Middle East and Ukraine that have continued to drive sociopolitical, geopolitical and economic uncertainty; severe weather events and other natural disasters; and the impact of healthcare, immigration, trade and other policies implemented by thefederal, U.S. administration;state and thelocal impact of federal government shutdowns.governments. These conditions are generally outside of our control, cannot reasonably be predicted and are interrelated or have interdependent complex consequences. As a result, the ultimate impact of these conditions on our business over time will depend on a myriad of future developments and is highly uncertain and difficult to predict. For additional discussion of general economic, marketplace and global health conditions that could impact our business, see Part I Item 1. "Business" and Part I Item 1A. "Risk Factors" in our 2025 10-K.

In the firstsecond quarter of 2026, treatment per day volumes were flatincreased compared to the fourthsecond quarter of 2025. Total treatment volumes in the firstsecond quarter were slightly ahead of expectations due to, among other things, better than expected patient census that was primarily driven by lower than expected mortality and higher patient transfers partially offset by lower than expected newincoming admissions.patient transfers and higher than expected missed treatments. Mortality levels over time may be influenced by a number of factors, among other things, the impact of infectious diseases on our patient population and the availability and use of vaccines, treatments and therapies. ChangesFor inexample, theseemerging mortality rates, particularlytreatments in the ESKDUnited andStates CKDthat populations,clear maymiddle inmolecules turnfrom impactthe admissionblood rates, treatment volumes, future revenues and non-acquired growth,may, among other things, reduce mortality as compared to standard dialysis treatments. Two current treatment pathways that provide middle molecule clearance are expanded hemodialysis (“expanded HD”) and hemodiafiltration (“HDF”). We will work to expand patient access to these therapies, as may be prescribed by their physician. We expect to begin offering expanded HD broadly across our network in the magnitudecoming of these cumulative impacts could have a material adverse impact on our results of operations, financial condition and cash flows. For additional detail on these risks, see the discussion in Part I Item 1A. "Risk Factors" of our 2025 10-K.quarters.

Global economic conditions and political and regulatory developments, including, among other things, ongoing inflationary pressures and U.S.U.S., state and local administration policies and actions have increased, and may continue to increase, our expenses.expenses and may have an impact on our revenue per treatment. For example, the decision to let enhanced premium tax credits expire at the end of 2025 has had an adverse impact on enrollment in the Affordable Care Act exchanges and our commercial mix, which in turn adversely impacts our revenue per treatment, among other things. These global economic conditions and political and regulatory developments also continue to exert pressure on our staffing and labor costscosts, which have increased duringyear theover year,year due to, among other factors, the continuation of inflationary conditions. While the cumulative impact of any increased staffing, labor, and supply costs and other expenses could be material, we have seen lower than expected labor-related costs due to, among other things,experienced productivity improvements and we expect these efficiencies to continue throughout the year. Our industry has also experienced increased union organizing activities. For example, union petitions have been filed at a number of our clinics in California. While weWe have wonhad somedifferent elections,results wewith elections and are in different stages ofwith the voting processelections and have been subject to legal challenges. For additional details on the risks related to rising labor costs and union organizing activities, see the discussion in Part I Item 1A. "Risk Factors" of our 2025 10-K under the headings, "Our business is labor intensive..." and "Global health conditions, changing population or demographic trends, severe weather events or natural disasters and general economic and political conditions..."

The discussion below includes analysis of our financial condition and results of operations for the three months ended MarchJune 31, 2026 compared to the three months ended December 31, 2025, and the year-to-date periods for the three months ended March 31,30, 2026 compared to the three months ended March 31, 2026, and the year-to-date periods for the six months ended June 30, 2026 compared to the six months ended June 30, 2025.

Our U.S. dialysis operating revenues and expenses are directly driven by treatment volume. The decreaseincrease in our U.S. dialysis treatments for the firstsecond quarter of 2026 from the fourthfirst quarter of 20252026 was primarily driven by aan decreaseincrease in treatment days,days partially offset byand increased patient count. The decreaseincrease in our U.S. dialysis treatments for the threesix months ended MarchJune 31,30, 2026 from the threesix months ended MarchJune 31,30, 2025 was primarily driven by aan declineincrease in averagepatient treatments per day due to mix of treatments days.count.

U.S. dialysis average patient service revenue per treatment for the firstsecond quarter of 2026 compared to the fourthfirst quarter of 20252026 decreased driven by achanges seasonalin declinepayor from co-insurance and deductiblesmix and other normal fluctuations, partially offset by increasesseasonal improvements including patients meeting their co-insurance and deductibles, and an increase in average reimbursement rates, including Medicare base rate and other annual rate increases.rates.

U.S. dialysis average patient service revenue per treatment for the threesix months ended MarchJune 31,30, 2026 increased compared to the threesix months ended MarchJune 31,30, 2025 primarily driven by an increase in average reimbursement rates from normal annual increases, including Medicare base rate,rate and other annual rate increases, as well as other normal fluctuations.fluctuations, partially offset by changes in payor mix.

U.S. dialysis patient care costs per treatment for the threesix months ended MarchJune 31,30, 2026 increased from the threesix months ended MarchJune 31,30, 2025 primarily due to increased compensation expenses, including increased wage rates, as well as increases in insurance costs and medicalhealth suppliesbenefits expense.

General and administrative expenses. U.S. dialysis general and administrative expenses in the second quarter of 2026 increased from the first quarter of 2026 decreased from the fourth quarter of 2025 primarily due to decreasedincreased professional fees and health benefits expense, partially offset by increased compensation expenses.fees.

U.S. dialysis general and administrative expenses for the threesix months ended MarchJune 31,30, 2026 increased from the threesix months ended MarchJune 31,30, 2025 due to increases in IT-related costs and compensation expenses, including increased wage rates.rates, partially offset by costs related to the cybersecurity incident, as described above.

Depreciation and amortization. Depreciation and amortization expense is directly impacted by the number of our dialysis centers and the information technology that we develop and acquire. U.S. dialysis depreciation and amortization expenses in the firstsecond quarter of 2026 decreased compared to the fourthfirst quarter of 20252026 primarily due to higherlower depreciation expense in the fourthsecond quarter for certain leasehold improvements.improvements and fully depreciated assets.

U.S. dialysis depreciation and amortization expenses for the threesix months ended MarchJune 31,30, 2026 compared to the threesix months ended MarchJune 31,30, 2025 decreased primarily due to fully depreciated assets.

Equity investment income. U.S. dialysis equity investment income for the firstsecond quarter of 2026 decreasedwas flat compared to the fourthfirst quarter of 2025 due to decreased profitability at certain nonconsolidated dialysis partnerships.2026. Equity investment income for the threesix months ended MarchJune 31,30, 2026 increased compared to the threesix months ended MarchJune 31,30, 2025 due to increased profitability at certain nonconsolidated dialysis partnerships.

U.S. dialysis operating income for the firstsecond quarter of 2026 decreasedincreased compared to the fourthfirst quarter of 2025 as a result of all factors discussed above.

Our other operations include ancillary services that are primarily aligned with our core business of providing dialysis services to our network of patients. As of MarchJune 31,30, 2026, these consisted principally of our U.S. IKC business, certain U.S. other ancillary businesses (including our clinical research programs, transplant software business, and venture investment group), and our international operations.

As of MarchJune 31,30, 2026, DaVita IKC provided integrated care and disease management services to approximately 62,60064,900 patients in risk-based integrated care arrangements and to an additional 6,3005,700 patients in other integrated care arrangements. We also expect to add additional service offerings to our business and pursue additional strategic initiatives in the future as circumstances warrant, which could include, among other things, healthcare services not related to kidney disease.

For a discussion of the risks related to IKC and our ancillary services, see the discussion in the risk factors in Part I Item 1A. "Risk Factors" of our 2025 10-K under the headings,heading, "We invest in strategic and operational initiatives to maintain our business and expand our capabilities in a complex, evolving and highly regulated environment..." and "If we are not able to successfully implement our strategy with respect to our integrated kidney care and value-based care initiatives..."

As of MarchJune 31,30, 2026, our international dialysis business owned or operated 596595 outpatient dialysis centers located in 14 countries outside of the United States.

Operating income (loss): and adjusted operating income (loss):

IKC operating income for the second quarter of 2026 compared to operating loss for the first quarter of 2026 compared to operating income for the fourth quarter of 2025 was primarily driven by a net decreaseincrease in shared savings. IKC operating lossincome for the threesix months ended MarchJune 31,30, 2026 compared to operating loss for the threesix months ended MarchJune 31,30, 2025 decreased,was primarilyimpacted due toby a net increase in shared savings.savings, partially offset by decreased revenues from our special needs plans.

U.S. other ancillary services operating loss for the firstsecond quarter of 2026 remained relatively flat compared to the fourthfirst quarter of 2025.2026. U.S. other ancillary services operating loss for the threesix months ended MarchJune 31,30, 2026 increased compared to the threesix months ended MarchJune 31,30, 2025 wasprimarily impacteddue byto a reduction of the earn-out obligations related to our transplant software business in the first quarter of 2025.

Corporate administrative support expenses for the firstsecond quarter of 2026 compared to the fourthfirst quarter of 20252026 decreased primarily due to decreased long-term incentive compensation, partially offset by increased professional fees. Corporate administrative support expenses for the threesix months ended MarchJune 31,30, 2026 compared to the threesix months ended MarchJune 31,30, 2025 decreased primarily due to decreased professional fees.fees and long-term incentive compensation.

(2)For a reconciliation of our effective income tax rate from continuing operations attributable to DaVita Inc., see the "Reconciliations of Non-GAAP measures" section below.

(2)For a reconciliation of our effective income tax rate from continuing operations attributable to DaVita Inc., see the "Reconciliations of Non-GAAP measures" section below.

Debt expense for the firstsecond quarter of 2026 compared to the fourthfirst quarter of 20252026 decreasedincreased primarily due to decreased weighted average effective interest rates, partially offset by increased borrowing activity on our revolving line of credit.credit and the issuance of Term Loan B-2 incremental amounts. Debt expense for the threesix months ended MarchJune 31,30, 2026 compared to the threesix months ended MarchJune 31,30, 2025 increased primarily due to an increase in our long-term debt balance related to the issuance of the 6.75% senior notes due 2033 in the second quarter of 2025, partially offset by decreased weighted average effective interest rates.

The three and six months ended DecemberJune 31,30, 20252026 included debt extinguishment and modification costs of $9$2 million composed partially of fees incurred in connection with the Term Loan A-2B-2 refinancingincremental transaction and partially of deferred financing costs written off for the extinguishment of Term Loan A-1 and prior revolving credit facility.transaction.

Other income for the second quarter of 2026 increased compared to the first quarter of 20262026, comparedprimarily due to lossdecreased for the fourth quarter of 2025 was impacted by equity investmentnet losses inon the fourth quarter of 2025 at Mozarc Medical Holding LLC (Mozarc) which included impairment and restructuring charges.investments. Other income for the threesix months ended MarchJune 31,30, 2026 compared to other loss for the threesix months ended MarchJune 31,30, 2025 was impacted by equity investment losses at Mozarc Medical Holding LLC recognized in the first quarter of 2025 and decreasednet gains on other investments in 2026 compared to net losses onin other investments.2025.

The effective income tax rate from continuing operations and the effective income tax rate from continuing operations attributable to DaVita Inc. decreasedincreased for the firstsecond quarter of 2026 compared to the fourthfirst quarter of 20252026 primarily due to a reduction in the impact of valuation allowances and nondeductible executive comp, partially offset by larger discrete benefits recognized in the fourthfirst quarter of 20252026 primarilyfrom stock-based compensation, partially offset by tax benefits related to renewable energy credits purchased in the releasesecond quarter of reserves that expired under the statute of limitations. Additionally, our effective income tax rate from continuing operations was also impacted by the portion of earnings attributable to our non-controlling interests.2026.

The effective income tax rate from continuing operations and the effective income tax rate from continuing operations attributable to DaVita Inc. for the threesix months ended MarchJune 31,30, 2026 increaseddecreased compared to the threesix months ended MarchJune 31,30, 2025 primarily due to the recognition of the write down of a reduction2014 intax discreterefund benefits recognizedclaim in the quarter as a percentage of earnings. Discrete items include benefits recognized in each period for stock-based compensation partially offset by an uncertain tax position recognized in the firstsecond quarter of 2026.2025.

The decrease in net income attributable to noncontrolling interests for the firstsecond quarter of 2026 fromwas relatively flat compared to the fourthfirst quarter of 2025 was due to decreased profitability at certain U.S. dialysis partnerships.2026. The increase in net income attributable to noncontrolling interests for the threesix months ended MarchJune 31,30, 2026 from the threesix months ended MarchJune 31,30, 2025 was due to increased profitability at certain U.S. dialysis partnerships.

Our U.S. dialysis accounts receivable balances at MarchJune 31,30, 2026 and December 31, 2025 were $1.695$1.719 billion and $1.610 billion, respectively, representing approximately 52 days and 49 days of revenue outstanding (DSO), respectively. The increase in DSO is primarily due to timing of collections. Our DSO calculation is based on the current quarter’s average revenues per day. There were no significant changes from the fourthfirst quarter of 20252026 to the firstsecond quarter of 2026 in the carrying value of accounts receivable outstanding over one year old.

Consolidated cash flows from operating activities during the threesix months ended MarchJune 31,30, 2026 increased compared to the threesix months ended MarchJune 31,30, 2025. The increase was principally due to changes in working capital as well as an increase in operating results.results combined with favorable changes in working capital, benefiting from favorable collections during the six months ended June 30, 2026 compared to the disruption in collections related to the cybersecurity incident, as discussed above, during the six months ended June 30, 2025.

Free cash flow during the threesix months ended MarchJune 31,30, 2026 increased as compared to the threesix months ended MarchJune 31,30, 2025 primarily due to an increase in net cash provided by operating activities, as described above, andpartially decreasesoffset by a decrease in capitalproceeds expenditures.from sale of self-developed properties.

Significant sources of cash during the period included the incurrence of an incremental Term Loan B-2 tranche in the aggregate principal amount of $500 million and net draws on our revolving line of credit of $375$65 million. Significant uses of cash included regularly scheduled principal payments under our senior secured credit facilities totaling approximately $13$25 million on our Term Loan A-2 and $5$11 million on Term Loan B-2, as well as additional required payments under other debt arrangements. In addition, during the threesix months ended MarchJune 31,30, 2026 we used cash to repurchase 3.05.2 million shares of our common stock.

By comparison, the same period in 2025 included netthe draws on our revolving lineissuance of creditthe 6.75% Senior Notes in the amount of $425$1,000 million. Significant uses of cash during the three months ended March 31, 2025 included the repayment of $93 million in interest-free funding made available by UnitedHealth Group and its affiliates following the cybersecurity breach that affected Change HealthcareHealthcare, a subsidiary of UnitedHealth Group, during the first quarter of 2024, regularly scheduled principal payments under our senior secured credit facilities totaling approximately $30$59 million on our Term Loan A-1 and $4$8 million on Term Loan B-1, and additional required payments under other debt arrangements. We also recognized financing cash outflows of $12 million in deferred financing costs related to the 6.75% Senior Notes transaction, as well as $13 million in cap premium fees for our 2025 forward interest rate cap agreements. In addition, during the threesix months ended MarchJune 31,30, 2025 we used cash to repurchase 3.76.7 million shares of our common stock.

As of MarchJune 31,30, 2026, we had $1.125$1.435 billion available and $375$65 million drawn on our $1.5 billion revolving line of credit under our senior secured credit facilities. Credit available under this revolving line of credit is reduced by the amount of any letters of credit outstanding thereunder, of which there were none as of MarchJune 31,30, 2026. We separately had approximately $207$188 million in letters of credit outstanding under a separate bilateral secured letter of credit facility.

In addition, our effective income tax rate on income from continuing operations attributable to DaVita Inc. excludes noncontrolling owners' income, which primarily relates to non-tax paying entities. We believe this adjusted effective income tax rate from continuing operations is useful to management, investors and analysts in evaluating our performance and establishing expectations for income taxes incurred on our ordinary results attributable to DaVita Inc.

(1)Represents ancharges accrualrecognized forto potentialremediate third-partya judgmentcybersecurity costsincident forand certainrestore legalsystems matters.during the second quarter of 2025. We have excluded thisthese chargecharges from our non-GAAP metrics because, among other things,as we do not believe itthey isare indicative of our ordinary results of operationsoperations. becauseSee additional discussion above under the chargeheading is"Cybersecurity significantincident-related andcharges" maywithin obscure"U.S. analysisdialysis results of underlying trends and financial performance of our current business.operations".

In addition to the debt obligations and operating lease liabilities reflected on our balance sheet, we have certain potential commitments associated with letters of credit, working capital funding or other financing, if necessary, to certain nonconsolidated businesses that we manage and in which we own a noncontrolling equity interest or which are wholly-owned by third parties. We also have agreed to future investments in particular equity method and other investments if certain milestones are achieved or capital calls are made, as applicable. Additionally, see Note 714 to the condensed consolidated financial statements for discussion onof commitmentsthe relatedacquisition to our agreement to acquireof a noncontrolling minority interest in Elara Caring.Caring, which closed effective July 20, 2026. For additional information, see Note 16 to the consolidated financial statements included in our 2025 10-K.

For information on the maturities and other terms of our long-term debt,debt and outstanding letters of credit, see Note 6 to the condensed consolidated financial statements.

As of MarchJune 31,30, 2026, we have outstanding purchase agreements with various suppliers to purchase set amounts of dialysis equipment, parts, pharmaceuticals, supplies and technology services. If we fail to meet the minimum purchase commitments under these contracts during any year, we are required to pay the difference to the supplier, as described further in Note 16 to the Company's consolidated financial statements included in our 2025 10-K.